Paycom Software (PAYC) investor relations material

Executive summary

• Achieved first quarter 2026 revenues of $572 million, up 7.8% year-over-year, driven by new client additions, expanded product usage, and automation initiatives, with strong client engagement and positive feedback on AI capabilities.

• GAAP net income was $155.7 million ($3.04 per diluted share); non-GAAP net income was $161.3 million ($3.15 per diluted share), with operating income up 13.5% to $210.2 million.

• Adjusted EBITDA reached $275.4 million, reflecting a 48.2% margin and including a $9.0 million gain from a naming rights agreement amendment.

• Recognized as a top HR and payroll provider, earning industry awards and high Net Promoter Scores, supporting strong client retention.

• Only about 5% of the addressable market served, highlighting significant long-term growth opportunity.

Financial highlights

• Total revenue reached $572 million, up 7.8% year-over-year; recurring and other revenue was $544 million, up 8.8%.

• Adjusted EBITDA was $275.4 million, with margin expansion to 48.2% year-over-year.

• Operating income increased to $210.2 million; adjusted gross margin improved to 85.1%.

• Ended the quarter with $154 million in cash and cash equivalents.

• Free cash flow was $182.7 million, with a 31.9% margin.

Outlook and guidance

• Reaffirmed full-year 2026 revenue guidance of $2.175–$2.195 billion, representing 6–7% growth year-over-year.

• Full-year recurring and other revenue expected to grow 7–8% year-over-year.

• Full-year adjusted EBITDA projected at $950–$970 million, with a 44% margin at the midpoint.

• Management expects continued growth through new client acquisition, expanded application adoption, and international expansion.

• Expects positive cash flow impact from U.S. tax law changes allowing immediate deduction for R&D expenditures.